Senators Reach 2-Year Budget Deal

U.S. Senate Majority Leader Mitch McConnell (left) chats with Senate Minority Leader Chuck Schumer in October. The two negotiated a budget agreement that marks a major breakthrough for a Congress still reeling from a partial government shutdown last month.

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Originally published on February 12, 2018 10:29 pm

Updated at 4:52 p.m. ET

Senate leaders reached a bipartisan budget agreement to increase military and domestic spending levels for two years, paving the way for the first long-term spending pact since President Trump took office.

The White House and House Speaker Paul Ryan quickly declared support for the pact, helping pave the way for its passage by the end of the week, despite opposition from fiscal hawks and liberal Democrats.

The plan waives mandatory spending cuts required under a 2011 budget law for two years, which allows for $300 billion in additional spending for the 2018 and 2019 fiscal years. The Pentagon will get an additional $80 billion this year and $85 billion next year, while domestic spending is increased by $63 billion this year and $68 billion next year.

The agreement was negotiated by Senate Majority Leader Mitch McConnell and Senate Minority Leader Chuck Schumer and marks a major breakthrough that will make it easier to manage the federal government through Sept. 30, 2019.

"No one would suggest it's perfect, but we worked hard to find common ground," said McConnell, who announced the agreement on the Senate floor.

White House spokeswoman Sarah Huckabee Sanders said the deal's higher military spending achieved a top priority for Trump. It is $26 billion more than Trump had requested in his own budget, and Sanders said the president believes it will achieve "the strongest military we have ever had."

"This budget deal is a genuine breakthrough," Schumer said, adding the agreement would "break the long cycle of spending crises."

Democrats secured higher domestic spending levels than most Republicans support, as well as funds to combat the opioid crisis, improve veterans' health care and fund the Children's Health Insurance Program for a decade.

The agreement will also allow for nearly $90 billion in additional emergency spending for ongoing recovery efforts related to recent hurricanes and wildfires. There is bipartisan support for that funding, aimed at hard-hit states such as California, Florida and Texas.

The deal also suspends the debt ceiling, which the federal government had been due to reach within the next month, until March 2019.

A long-term spending agreement had long been sought by military leaders, who have been warning Congress that a recent series of short-term funding bills were harming military readiness.

"I cannot overstate the negative impact to our troops and families' morale from all this budget uncertainty," said Defense Secretary James Mattis at the White House. "Today's congressional action will ensure our military can defend our way of life, preserve the promise of prosperity and pass on the freedoms you and I enjoy to the next generation."

A final vote on the budget deal is likely by Friday, which means lawmakers would have to pass a one- or two-day spending bill to keep the government open past the current midnight Thursday funding deadline.

All told, the Republican-controlled Congress is on track to approve about $400 billion in new spending over the next two years, just months after enacting a nearly $1.5 trillion tax cut.

Rep. Chris Collins, R-N.Y., called it a "bitter pill of sorts we are swallowing on the fiscal side" but said that military needs overrides deficit concerns. Like many Republicans, Collins also maintains that the tax cuts will ultimately spur enough economic growth to make up for the projected $1 trillion loss in revenues over the next decade.

Fiscal hawks like Rep. Mark Meadows, R-N.C., told reporters that he could not support the deal. "I can tell you that I obviously consider the president a close personal friend and even if he called me and asked me to vote for this, I'm afraid the answer would still be 'no,' " he said. "I think it's fiscally irresponsible to support it."

The agreement would also create bicameral, bipartisan congressional commissions on budget reform and pension reform to report back to Congress by the end of the year. Meadows dismissed those efforts as "window dressing" calling them "a shiny object that, at the end of the day, I don't know will make any difference."

Conservative activists began mobilizing against the budget deal as soon as it was announced. "The country cannot afford an irresponsible plan that welcomes back trillion-dollar deficits with open arms. Congress should reject this deal," said Justin Bogie, a senior policy analyst with the influential conservative Heritage Foundation.

In addition, House Democrats, led by Minority Leader Nancy Pelosi, D-Calif., are staging a protest of the budget deal on the House floor Wednesday because there has been no progress on an immigration deal. Pelosi said she opposes the budget deal cut by Schumer because there is no similar agreement in the House to soon begin debate on immigration legislation.

In the Senate, McConnell has pledged to begin an open debate on the Senate floor to see whether senators can find 60 votes there on a bipartisan immigration deal to determine the fate of people who were brought to the U.S. as children and do not have legal status. Ryan has not offered a similar pledge, but he has said he will bring an immigration deal to the floor when it's clear what the president will support.

Copyright 2018 NPR. To see more, visit http://www.npr.org/.

MARY LOUISE KELLY, HOST:

Senate leaders reached a deal today that holds the promise of breaking the partisan standoff over federal spending. Majority Leader Mitch McConnell announced the deal on the Senate floor.

(SOUNDBITE OF ARCHIVED RECORDING)

MITCH MCCONNELL: No one would suggest it is perfect, but we worked hard to find common ground and stay focused on serving the American people.

KELLY: It is a two-year deal, and it would increase spending by $300 billion over those next two years. NPR congressional correspondent Susan Davis has the details, and she joins us now. Hey, there.

SUSAN DAVIS, BYLINE: Hey, Mary Louise.

KELLY: So does this mean maybe we won't be here talking every few weeks about yet another looming government shutdown?

DAVIS: I think it might. You know, the Eagles won the Super Bowl, and we get a budget deal.

KELLY: (Laughter).

DAVIS: This is a much more positive week than I anticipated.

KELLY: For you at least - (unintelligible) Eagles.

DAVIS: You know, the goal (laughter) here is certainly to break that cycle of short-term funding bills and shutdown threats that we've been living in since September. It will give Congress the roadmap they need to pass all of their annual spending bills and bring what they hope is a little sanity back to the budget process. They will have to pass one more stopgap through March 23. And at the end of that, they intend to pass the longer-term spending bills.

KELLY: Well, let's unpack what's in this deal. It increases money for the Pentagon. It also increases domestic spending. So that's a win in there for Republicans who want more military spending, also a win in there for Democrats who say they want more domestic spending. What else is in there?

DAVIS: Also tucked into this, it's going to include another $90 billion about in emergency spending for ongoing disaster relief related to the hurricanes and the wildfires we've had in recent months. It will also include a one-year increase in the debt limit through March of 2019. The debt limit, as we've said before, is essentially like the nation's credit card. Congress needs to periodically vote to increase it so the country doesn't default on its debts.

The White House has already announced support for this deal. In particular, the additional military spending in there has been a top priority for President Trump. This deal includes $26 billion more than he even asked for in his budget. Spokeswoman Sarah Huckabee Sanders today said that the president believes this bill will achieve, quote, "the strongest military we have ever had." Democrats have some wins in here, too. There's more funding to combat the opioid crisis, to pay for veterans' health care. And they secured 10 years of funding for the Children's Health Insurance Program.

KELLY: Well, let me introduce a D-word into this conversation. That would be deficit. I mean, this...

DAVIS: Yes.

KELLY: ...Deal would - as you're telling me, it would OK hundreds of billions in more spending. And that's just a few months after lawmakers OK'd a tax cut that is going to bring in a trillion dollars less in revenue. How is that going to work?

DAVIS: The cost of this two-year spending bill, if you can believe it or not, is higher than anything Republicans ever supported under a Democratic president - President Obama. The combination of these tax cuts and the spending could potentially add up to even more economic stimulus than they ever approved under President Obama.

You know, I asked this question to Republicans today. Can you still say you're the party of fiscal responsibility? New York Republican Chris Collins told me that Republicans think this is a bit of a bitter pill, but they still believe those tax cuts will pay for themselves in economic growth. And a lot of conservatives like - North Carolina Republican Mark Meadows told me today he will not vote for this even if President Trump calls him and asks for his vote.

KELLY: So have all the deficit hawks in Congress got up and flown?

DAVIS: You know, I always say deficit hawks are much louder when they're not in the majority.

KELLY: Wow. What about on the House side? I mean, this is a Senate deal. What are its prospects in the House?

DAVIS: You know, House Minority Leader Nancy Pelosi has said she will not support the deal, although it is still expected to pass with some amount of Democratic support. She made a pretty dramatic stand against the bill today speaking for hours and hours in protest because they're moving forward on a budget deal without an immigration bill. What we do know is that the Senate will turn next to immigration, and Senate Majority Leader Mitch McConnell says he'll have an open debate and see what they can pass in the Senate.